Seeking Alpha

10-year yields hover near two-year highs

  • For the second day in a row, the yield on the 10-year hovers around 3%.
  • Some say the move is reflective of the country's economic momentum and could thus be sustainable. The last time yields exceeded the psychologically important threshold was in September, but that move was short-lived.
  • One senior bond trader quoted by the WSJ thinks yields could hit 3.25% over the next three months. The 10-year hit 3.021% at one point in Friday's session.
  • ETFs: TBT, TLT, TMV, TBF, EDV, TTT, TMF, TLH, ZROZ, SBND, DLBS, VGLT, UBT, TLO, LBND, TYBS, TENZ, DLBL
Comments (8)
  • What Is There To Do When Stocks Are Expensive And Bonds Are Crazy Expensive? http://seekingalpha.co...
    27 Dec 2013, 02:57 PM Reply Like
  • Do you believe that, increasingly, the companies whose stocks would be the best investments have been driven from the stock markets by the stringency of the new rules for public offerings? Are many of these ventures going the route of private equity investment to escape the expense and legal hassles of public IPO's? Do you recommend any way that small investors can participate in these private equity investments in a reasonably safe & diversified way? Thanks, Chris.
    27 Dec 2013, 11:11 PM Reply Like
  • i would agree DEBT is very expensive (if you're the buyer--if you're the seller...aka Verizon...never a better time to do a deal) but "bonds" or "bonding authorities" don't seem "expensive" to me. All a bond is is simply an authority over cash an equity...the first line of repayment in case of default. Since I would argue default risk is quite...and obviously the dollar is soaring in value right now (especially against the Yen)...bonds still have tremendous value here. But as with shorting Twitter so it will be with Treasuries. The media blowtards only scream one thing repeated "SHORT!" And have been utterly exterminated as a consequence. Ideally Bank of America would go belly up here and this would give folks the proper view of what risk really is. We'll see if the "PTB" allow it. So far its annihilate every other bank but them interestingly....
    27 Dec 2013, 03:08 PM Reply Like
  • How about 4% over the next few months? Possible?
    27 Dec 2013, 06:22 PM Reply Like
  • The question is - who has the power to control the rates ??
    27 Dec 2013, 08:04 PM Reply Like
  • The Fed has lost control of this since rates become more subject to market pressures as they have to give up the monopoly of the bond purchases. The 10 year has effectively doubled in about 2 years. Rising interest rates would not be a problem if the economy was truly healthy, but with labor force participation, poor demographics, and much of the economy built on top of leverage through low interest rates, higher rates represent a significant headwind.
    Market forces favor higher rates since global interest in US Debt with massive Q/E in force in Japan and expected in Europe replace purchase of US debt with purchase of sovereign debt. China's property bubble and other policy issues are also steering them towards less reliance on US Debt.
    28 Dec 2013, 06:00 PM Reply Like
  • Thats 3% is an important psychological level
    28 Dec 2013, 08:30 AM Reply Like
  • Yields will likely stay high and maybe go higher until the t-frosh again take the debt ceiling hostage -- March-August timeframe. At that time, be prepared for yields to drop as the supply of t-bills is threatened. The effect of these repeated attempts at hostage taking are weakening, since no one takes this seriously anymore but the effect will probably not be zero.
    29 Dec 2013, 12:35 PM Reply Like
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